M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 11 – Agriculture and Rural Development TRADE MECHANISMS Lidija Rmuš Chamber of economy of Montenegro Bilateral screening: Chapter 11 Brussels, December 2012

The framework for implementation of trade policy measures is provided by: The Law on Agriculture and Rural Development (Official Gazette of Montenegro No. 56/09) The Law on Foreign Trade (Official Gazette of the Republic of Montenegro No.28/4 and 37/07) The Decree on Customs Tariff for 2012 (Official Gazette of Montenegro No. 43/2012) The Protocol on Montenegro’s Accession to the Marrakesh Agreement on Establishing of the World Trade Organization (Official Gazette – International Agreements No. 3/2012) The Law on Intervention Procurements (Official Gazette of Republic Montenegro No. 69/03) TRADE MECHANISMS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 11: Agriculture and Rural Development

The Law on Agriculture and Rural Development enables : That the Government may introduce safeguard measures in foreign trade in agricultural products, in case there is a risk of serious distortion of the market in agricultural products in in accordance with the Law on Foreign Trade. That the Government may apply intervention measures of buying and selling, support to storages and withdrawal of certain agricultural products from the market, in accordance with the Law The Law on Intervention Procurements in conditions of serious market distortions regulates the process of ensuring continuity of supply in Montenegrin markets, regarding main staple food products, basic wheat products, edible oil, sugar and other products TRADE MECHANISMS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 11: Agriculture and Rural Development

Protocol on Montenegro’s Accession to the Marrakesh Agreement on Establishing of the World Trade Organization defines : the highest permitted tariff levels (IBR and FBR) as well as the period of implementation for the World Trade Organization. that Montenegro is not entitled to apply export subsidies or special safeguard measures lays down the obligation of Montenegro to gradually reduce its tariffs on imports of agricultural products during the transition period, (from 3-10 years), and the final deadline of application is 2022 TRADE MECHANISMS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 11: Agriculture and Rural Development

The system of quotas : is defined only in the Agreement on Stabilisation and Association, as well as in the Free Trade Agreement with Turkey The use of tariff quotas agreed is in accordance with the system „first come first served”, The tariff quota management is in hands of the Customs Administration TRADE MECHANISMS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 11: Agriculture and Rural Development

Tariff rate: The overview of the amount of basic tariffs by products, as well as preferential tariffs by products and countries, is published every year in the Decree on Customs Tariffs, which harmonized with the EU nomenclature yearly. The import customs tariffs on agricultural and food products are applied depending on: - the value (ad valorem) - while for a number of sensitive products, they are also applied by the special levy expressed in EUR/kg. TRADE MECHANISMS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 11: Agriculture and Rural Development

The system of monitoring the imports and exports with permits/licences is not applied in Montenegro on agricultural and food products ; The submission of guarantees is not necessary when making imports or exports ; Montenegro does not apply the system of subsidies for export Currency of payment is Euro ; There is no mechanisms by which the authorities are charged with buying in/storage/sales of aagricultural products with a view to temporarily reducing market pressure. TRADE MECHANISMS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 11: Agriculture and Rural Development

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Poglavlje 25 Nauka i istraživanje Chapter 11: Agriculture and Rural Development TRADE MECHANISMS International cooperation: WTO EU CEFTA EFTA BILATERAL AGREEMENTS - Montenegro is applying the free trade agreements with Turkey and the Russian Federation - the Agreement with Ukraine has not entered into force yet, as it has not been ratified by Ukraine. -the negotiations with Byelorussia and Kazakhstan (as members of the Customs Union with the Russian Federation) are underway.

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union TRADE MECHANISMS Poglavlje 25 Nauka i istraživanje Chapter 11: Agriculture and Rural Development W T O Montenegro is a member of the World Trade Organization since the end of April this year In according with the Protocol on the Accession concessions are granted by the progressive lowering of tariffs but not by the agreed tariff quotas;

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union TRADE MECHANISMS Poglavlje 25 Nauka i istraživanje Chapter 11: Agriculture and Rural Development S A A SAA enables Montenegro tariff free access to the EU market for all agricultural and food products, except for live cattle and beef, wine and some fish products for which tariff preferences have been set, which imply reduction of tariffs under quotas. Import tariff rates (three lists) for agricultural and food products from the EU have been gradually reduced over the period , and as of 2012, only the List III – Sensitive Products is applied, which applies 50% of the MFN tariff. Quotas were agreed for wine (3,500 hl) and for some types of fish and fish products

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union TRADE MECHANISMS Poglavlje 25 Nauka i istraživanje Chapter 11: Agriculture and Rural Development C E F T A Since the beginning of 2012 Montenegro has had free trade with: Serbia, BiH, Macedonia, Kosovo, Albania and Moldova, With Croatia it has an asymmetrical liberalization approach to the benefit of Montenegro. - full liberalization for placement of Montenegrin products to the Croatian market, -while for placement of Croatian products on Montenegrin market, has been agreed to protect (concessions-in the form of lower tariffs) a very small number of products (list of 50 - even tariff positions).

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union TRADE MECHANISMS Poglavlje 25 Nauka i istraživanje Chapter 11: Agriculture and Rural Development E F T A The free trade agreement between Montenegro and the EFTA members has been applied: - with Switzerland and Liechtenstein since September 1, with Iceland since of October 1, with Norway since November 1, 2012 EFTA granted asymmetrical concessions to the benefit of Montenegro, while Montenegro got completely free access to the EFTA market when it comes to fish market. The import of sensitive agricultural and food products from the EFTA members is treated in almost the same manner as imports of goods from the EU.

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union TRADE MECHANISMS Poglavlje 25 Nauka i istraživanje Chapter 11: Agriculture and Rural Development OTHER AGREEMENTS The agreement with Turkey entered into force on March 1, 2010: -The access to the commodity market is asymmetrical to the benefit of Montenegro; a very low liberalization level has been achieved in the part that relates to agricultural products. Montenegro has applied the agreement with the Russian Federation since 2001; - import of Russian products is fully liberalized, while from the Russian side there is a small list of exceptions for imports of Montenegrin agricultural and food products. Negotiation with Byelorussia and Kazakhstan, are in process.

M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union TRADE MECHANISMS Poglavlje 25 Nauka i istraživanje Chapter 11: Agriculture and Rural Development MONTENEGRO will bring a Law on the organization of the agricultural products in accordance with the regulations in 1234/07 until the date of accession in order to establish institutional arrangements to improve the organization and implementation of appropriate market mechanisms

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